A leading specialist in illegal money lending has identified five crucial warning signs to help people protect themselves from predatory lenders who may be closer than they think. Despite her extensive knowledge of these financial traps, Cath Wohlers, operations manager for England's Illegal Money Lending Team, admits that even she has been deceived by fraudsters.
As deceptive tactics become more sophisticated, an increasing number of individuals are falling victim to these unlawful lenders. Wohlers explained that these predators often operate within trusted social circles. "Loan sharks can be anyone – there's no one-size-fits-all," she said. "Before I started this role, I used to think that they were men in gangs with baseball bats. But it's actually online, at the school gates, in the workplace or in your own home."
Wohlers noted that what may seem like an act of kindness can be something entirely different. "It all starts with a simple gesture. If you're struggling to pay the electricity bill, someone you know may offer to lend you the money. There's no mention of interest or paperwork, so it's seen as a favour. But we're seeing people get caught out, as those lending the money will eventually want it back – and cause havoc when it's not coughed up."
The specialist has encountered many heartbreaking situations, including a mother who mistakenly believed she was receiving help from a close companion. "She initially borrowed £50 from someone her sister knew. The deal was that when she got paid, she would give back double, so £100, which she did. But that meant she was short the month after, so she borrowed again, before paying back double."
"This went on and on to the point where that initial £50 turned into £2,500. At that point, she had paid back £26,000 with the lender, who said she still owed £16,000. This lady was living off cornflakes and wasn't able to feed or clothe her kids. The loan shark was following her to school, shouting abuse and sent lots of horrid messages each day. It made her life a living hell," said Wohlers.
Where to Get Help if You're in Debt
If you are struggling financially, there are charities that specialise in helping you find manageable solutions:
- StepChange: Call 0800 138 1111, Monday to Friday, 8am to 8pm, Saturday, 9am to 2pm
- Citizens Advice: Call (England): 0800 144 8848, (Wales): 0800 702 2020, (Scotland): 0800 028 1456. Monday to Friday, 9am to 5pm (local branch hours may vary slightly)
- National Debtline: Call 0808 808 4000. Monday to Friday, 9am to 8pm, Saturday, 9.30am to 1pm
- PayPlan: Call 0800 316 1833. Monday to Friday, 8am to 8pm, Saturday, 9am to 3pm
- MoneyPlus Advice: Call 0161 837 4754. Monday to Thursday, 8am to 7.30pm, Friday, 8am to 4pm
- Money Wellness: Call 0161 518 8285. Monday to Friday, 9am to 8pm, Saturday and Sunday, 10am to 4pm
- Debt Advice Foundation: Call 0800 043 4050. Monday to Friday, 8am to 6pm
Five Warning Signs of Loan Sharks
No Questions Asked
"If you're offered a loan with no questions asked, it's not a good sign. It also might be followed by them telling you not to mention it to anyone. It could happen at the office watercooler." Wohlers explained: "You've not got enough money for the weekend, so your colleague says they'll lend you the money. But it's usually with the caveat that it cannot be mentioned to anyone. Then, when you don't have the money come payday, they can make up repercussions that never existed."
Private Accounts Used
The expert urges the public to remain vigilant if they are requested to send cash directly or transfer funds into a personal account. "If you're given no paperwork or receipts, the loan is much harder to track. So you've got this outstanding debt over your head. And may never know how much you've paid back or how much you'll still owe."
Surrendering Your Possessions
"Loan sharks will often demand items like passports, bank cards or jewellery as 'security'. But, in reality, it's a way of tightening their grip and controlling every aspect of someone's life. We see this all too often, effectively trapping people and stripping away their freedom. Others are forced to hand over bank cards or details, giving the lender direct access to their money whenever they choose. This leaves people cut off from their own finances and completely at the mercy of the loan shark. It's incredibly isolating and devastating."
Steep Repayment Costs
A total absence of official documentation is standard practice, which inevitably creates severe financial misery for borrowers later on. Wohlers said: "Loan sharks don't give people an agreement to sign, because they don't want people to know how much they're going to pay back. They want to keep them in the dark and don't want a written record of their activity. In the end, you'll be paying a high amount of interest or extra charges and you may never be able to pay the loan back."
Experiencing Intense Fear
Many vulnerable people face severe manipulation and emotional distress when they find themselves falling behind on their scheduled payments. "About half the people we supported last year genuinely believed they were borrowing from a friend. Further down the line, they realised this person was not a friend after all," said Wohlers. "The threats aren't physical a lot of the time. It's coercive control, badgering people with text messages, hammering on the door or threatening to tell partners about loans. We've also seen loan sharks shaming people on social media."
The specialist clarified that obtaining financial support from genuine loved ones is not always a cause for concern. "It's just crucial to know who you're really dealing with. It's often those who appear friendly – people you don't know quite so well or haven't known for long – who pose the biggest risk."
"If you find yourself questioning why someone is offering you money, or what they might expect in return, that should be ringing alarm bells. Trust your instincts. If something doesn't feel right, it probably isn't. And that's the moment to take a step back and protect yourself."
